Dairy exporter facility appeals to long term investors
Dairy exporter facility appeals to long term investors
| 3 November 2018
A high-quality, well located industrial property offering a long term lease to a dairy industry tenant provides the type of investment opportunity seldom on offer in the Auckland market.
The 6,152 sqm property is located at 12 Harbour Ridge Drive in a new, modern business park environment in the Auckland industrial hub of Wiri.
The property is being marketed by Paul Steele, Chagalle Ellis and Bruce Catley of CBRE and is due to be sold by deadline private treaty closing at 4pm on Thursday 6th December, if not sold prior.
12 Harbour Ridge Drive is being offered for sale at a time when quality industrial properties, particularly those offering long term income streams and fixed rental growth are extremely scarce, says Steele.
“In this highly connected location near to Auckland Airport, Wiri Inland Port, as well as SH1 and SH20, and with an outstanding and fit-for-purpose building design and build quality, 12 Harbour Ridge Drive will be an attractive tenant proposition for decades to come.
“It would be hard to beat an investment as stable and hassle-free as this brand-new purpose-built property, designed for and fully tenanted on a 10-year lease to infant milk formula manufacturer NBL. Given the combination of immediate and longer-term income potential, we’re expecting the property to attract strong interest from a range of investors, from private individuals through to larger syndicates.”
The tenant NBL specialises in the sourcing, blending and packaging of milk powder for the growing export market, capitalising on the strong demand for New Zealand dairy products throughout Asia.
Built by well-regarded industrial property developer Euroclass and facing onto an attractive reserve area within the Stonehill Business Park, 12 Harbour Ridge Drive consists of a generous approximately 3,500 qm warehouse with an attractive 2-storey 492 sqm office and a 24-metre-wide canopy, enclosed on three sides and providing excellent weather protection for devanning purposes.
Completed early last year, the warehouse includes full tilt slab concrete elevations and provides a stud height of approximately 10m at the knee rising to 11.5m at the apex. Access to the warehouse is via two over-sized roller doors on the northern elevation providing well sheltered protection from any prevailing winds. The attractive offices are set over two floors with excellent aspects over both the operating yard area, and distant views onto the Manukau harbour. The site has two access ways, including a separate car park entrance for the use of the office, providing segregation from the working yard area.
Steele says whilst purpose-built for the current tenant, the design, layout and specification provide a generic building envelope that will provide desirable warehouse accommodation for many decades to come.
“As a stand-alone offering 12 Harbour Ridge Drive provides a solid and flexible industrial property. In addition, NBL is investing approximately $8 million on fit-out to develop the site into a state of the art, milk powder processing facility for a number of product lines including infant milk formula. This additional capital expenditure coupled with the 10 year lease term illustrates the tenant’s long term investment in the property”.
Currently commanding a net rental income of $632,980 plus GST as part of a 10-year term with two 5-year rights of renewal, the lease allows for a final expiry in 2038, and is backed by a 12 month ANZ bank guarantee.
Built into the lease is fixed annual rent increases of 2.5% and starting already from a strong yield position, Managing Director for CBRE, Bruce Catley says the growth for investors is solid relative to current market rates.
“From the tenant funded fit out to the lease term, the current tenant is heavily vested in this site. Its key export market of China recently tightened regulations for the import of dairy products which has proven a real barrier to entry into the market it operates in. The fact NBL has now done this, means it is one step ahead of the curve and it will be looking to capitalise on this with strong plans for growth. For landlords, this provides certainty of return on its investment, reliable cashflow and a chance to play a part in the growth of an industry that is taking New Zealand milk powder to world markets.”
Ellis says the long-term commitment by NBL to the site coupled with a strong cashflow growth spells great news for investors. 12 Harbour Ridge Drive will be highly sought after due to the current demand for quality industrial properties in the Wiri industrial hub.
“Whether it’s the current use by an infant milk formula manufacturer, or the ability to be re-purposed for future logistics operations, properties like this – and particularly of this size and quality - are poised to capitalise on future growth and warehousing needs.”
“Against this backdrop, as a newly-built property in a prime, connected location with a long-term tenant with locked-in rental increases, 12 Harbour Ridge Drive is set to be a stable, hassle-free investment both now and well into the future: an exceptional asset.”
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CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.